The government has introduced several restrictions to fight the spread of coronavirus in Australia. Although lockdowns and social distancing are intended to protect the community, businesses nationwide are beginning to feel the negative impact on the economy.
Luckily, Australia’s property market is still in full swing despite COVID-19 restrictions. As the Prime Minister encourages Australians to stay home, public gatherings including open homes and in-room and onsite auctions are now prohibited.
Thanks to technology, however, real estate agents have learned to use these new laws to their advantage, allowing potential buyers to continue exploring investment opportunities.
Many agents have switched to online auctions and several properties that have already been listed for public auction will now be sold either through online auction or private treaty.
Private inspections are still allowed as long as there are proper social distancing measures in place. Buyers, vendors, and agents are required to stand more than 1.5 metres away from each other. They must also avoid any kind of physical contact including handshaking.
The impact on Australia’s property market
The spread of coronavirus across Australia is predicted to cause a 20% drop in house prices. The Reserve Bank has already cut interest rates to a record low 0.25% in anticipation of a COVID-19 recession. Combine this with the fact many Australians are going to be forced to sell their properties as a result of unemployment, and we could see the accelerated collapse of property values.
With social distancing causing lower levels of buyers in the market, competition is also not as strong. This increases the chances of investors obtaining the property they want at the best possible price.
In terms of post-COVID-19 impact, property investors can expect a jump in pricing as demand and competition will likely return. Once the fear of infection dies down, the resume of public auctions will make competition even more intense.
At this rate, investors should certainly make the most of the current situation by exploring discounted property investment opportunities.
Investing in the time of COVID-19
Buying and selling property is still possible amidst the growing pandemic. New video streaming technologies are helping facilitate the purchasing journey while following physical distancing guidelines.
Potential buyers can book a virtual home inspection via FaceTime, Skype, WhatsApp, or Google Hangouts, where the real estate agent is also present to answer any questions.
Similarly, investors can participate in an online auction in the comfort of their own home. Auctions are being conducted either at the property or at the real estate agency’s office and are being facilitated by a licensed auctioneer. Online auctions would follow the same regulations of an in-person auction.
Property settlement will also be done digitally. Moving home is still acceptable under new lockdown restrictions, with several moving companies still operating.
Relationships in a market like this is more important than ever. Call agents in the area you are interested in and discuss what off-market opportunities exist. Be honest about your financial situation and give parameters on what type of property you wish to buy, a rough budget, and what type of terms you can facilitate (ie. 30 day finance clause, building and pest inspection clause etc.)
In the wake of this global pandemic, Australia’s property market continues to thrive as landlords, investors, and renters are still searching for their next investment. However, potential buyers must have a deeper understanding of property laws to ensure safer remote transactions. Online property buying means less contact with local agents, so it’s more crucial than ever to make wise decisions.